Best Jumbo CD Rates for 2022 – Where Can You Find the Best Rates?

Daniel Penzing
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The Top Jumbo CD Rates

The best jumbo CD rate, the one that’s really paying attention to Jumbo CDs, is Ally Bank at 1-year 2.80 percent APY.

Remember, if you want to know what the current rates are for some of the Jumbo CD terms, just click on the link to right in the article.

A CD is a certificate of deposit. The interest rates you get from CDs are usually higher than the interest rate you would get from a savings account and checking account. The only drawback about CDs is that they are not liquid.

In other words, if you withdraw your money from a CD before it has matured, you will have to pay a penalty. There are so many CD products that may confuse you. And before you decide on which type of CD to purchase, you’ll probably want to know what each type is and the interest rates.

Knowing a little bit about the various types of CDs available will make it easier to make the decision of which type of CD to purchase.

There are plenty of CD products on the market and they’re referred to by a variety of different names including jumbo CDs, ultra CDs, long term CDs, and others. In this article, I’m going to explain the different types of financial instruments relating to CDs.

Why Choose a Jumbo CD?

Jumbo CD's are extremely popular among savers looking for higher CD interest rates. Many large and small banks offer these CD accounts – giving you plenty of options. When you enroll in a jumbo CD, you agree to keep your money locked up for a long period of time – typically between four months and seven years. In return, you are rewarded with a higher interest rate than you would receive on a traditional CD account.

When looking for a jumbo CD, you should compare rates and terms from multiple financial institutions. Before you choose an account, make sure to think about how much money you want to invest, how long you want to lock up your funds, and whether you want to tie up your money in a CD that is backed by the Federal Deposit Insurance Corporation (FDIC) or one that isn’t.

How to Dig Deeper into the Jumbo CD Market

Once you have narrowed your list down to a few good jumbo CD accounts, you should do a little more research. Call the bank or stop by the branch to find out more about the account, including the rates, terms, minimum deposit amounts and penalties for early withdrawal. You should also ask about the bank’s policies for customer service, such as how often you can expect to speak with a human being and whether you can expect your deposit to be insured by the FDIC.

What Is the Difference Between a Jumbo CD and a Regular CD?

Jumbo CD rates are considerably more competitive, sometimes even offering rates higher than the average bank’s money market rates.

How Are Jumbo CDs Taxed?

Jumbo certificates of deposit offer yields that can be more than one and a half times higher than the rates on standard CDs. But these big league returns come at a price, with stiff penalties for early withdrawal and jumbo CDs usually carrying a maturities of five years or longer. However, the promise of sizable rates has made jumbo CDs very enticing to investors, making it a worthwhile consideration for the right shopper.

For investors seeking a jumbo CD, some of the best rates can be found online. Just as online banks and savings institutions are able to offer CD rates that are higher than traditional institutions, the best jumbo CDs features rates that can be several times what you'll find at brick-and-mortar banks.

What Are the Early Withdrawal Penalties for Jumbo CDs?

As we have mentioned earlier jumbo CDs are longer term CDs with considerably higher rates than traditional certificates. So one of the major questions when picking jumbo CD is how long you will be able to survive with low earnings.

Right now, the best jumbo CD rates on 2- and 5-year CD terms, respectively, are 1.75% APY and 1.83% APY. Another important consideration is early withdrawal penalty fee, which usually ranges from six months interest penalty to a year.

Early withdrawal penalty is too high when compared to other investment products. But jumbo CD rates are also much higher as well. Further, higher rates of jumbo CDs are justified because of CD insurance.

In the case of CD insurance, the bank pays you the face value of the certificate if the bank was to close, in the meantime, you may earn higher interest. Though, be aware that under the current economy, some banks have been closing out while keeping the money.

Every bank has its own early withdrawal penalty for jumbo CDs. You should be ready for any penalty fees so you don't fall into financial distress.

The list below is going to share Best Jumbo CD Rates for the half-year period. If you want to get every bit of advantage of jumbo CDs, now is the time to visit the bank that offers high CD rates.

Are Jumbo CDs Safe?

Jumbo CDs have become popular with investors in recent years, but they are certainly not as safe as most people think. Long-term CDs, including jumbo CDs, still carry risk, particularly if you are interested in redeeming your money before the maturity date.

In fact, these CDs actually carry a high degree of risk. The reason is quite simple: in today’s environment where interest rates are quite low, they are quite unpredictable. In fact, it’s not difficult to anticipate that interest rates might eventually rise. If they do, that will likely increase the rate you can find on jumbo CDs. But if you need to redeem your money before the CD matures, it’s very possible that you won’t be able to find a jumbo CD with a better rate than the one you have. And that is risky.

So that leads to the next question – how much do jumbo CDs currently have as interest rates? Well, right now, the annual percentage yields on jumbo CDs range from about 2% to about 3%. There are even a few that have rates of 3.25%.

As long as they are available, a jumbo CD is probably going to be a safer investment than most stock investments. Yet it’s important to realize that they are not risk-free.